Cognitive Framework: Understanding mental capabilities offers a novel explanation for heterogeneous trading behavior and price bubbles. #Finance #BehavioralEconomics #Research

Performance Insights: Sophisticated traders achieve the highest gains, while Semiotic traders incur the largest losses. Non-monotonic relationship between mental capabilities and performance. #Trading #Economics #Research

Experimental results demonstrate that mental abilities have a crucial impact on trading, performance, and market dynamics. #AssetMarkets #Economics #Research

Trader Types: Four mental profiles identified: Sophisticated, Technocratic, Semiotic, and Featureless. Each showing a different trading profile, reacting differently on changes in fundamental and previous price. #Finance #BehavioralEconomics

Mental Capabilities in Trading: analytical capability (quantitative and logical reasoning) and mentalizing (putting yourself into the shoes of others) drive trader behavior in asset markets. Those proficient in both succeed most. #Finance #Trading #Economics